Music Streaming Has a Fraud Problem and It’s Almost Impossible to See
Spotify has a new general counsel, ex-Microsoft lawyer Horacio Gutierrez. He’s stepping right into two class-action lawsuits alleging that the company isn’t paying out mechanical royalties to artists and composers as they should. Once he moves into his office, he’ll find that it’s already occupied by many, many nests of hornets. One of them involves the use of click fraud to bilk streaming companies of out money. It’s out-and-0ut theft.
The problem is that this sort of thing is almost completely undetectable. Quartz takes a look at the situation.
Click fraud—the use of automated digital bots to “click” on payment-generating links and steal money by pretending to be consumers—has long been a problem in the online advertising industry. Websites stand to lose as much as $7.2 billion from fraudulent traffic in 2016, according to a study this January from the Association of National Advertisers.
